In a book, I came across a sentence that I quite liked: "Financial investment is one of the important means for people to pursue wealth growth, and it is also the most suitable way for everyone to participate in making money. No matter who you are or where you come from, as long as you are willing to participate, you can make money in the financial market."

We have known the story of the little horse crossing the river since childhood, and we often encounter many scenarios similar to the little horse crossing the river in life. Financial investment is one of them. No matter how others say it is good or bad, only those who truly participate know: "The financial market is not just about making money; it is a place where investment risks and returns coexist. In order to achieve better returns, we need to master some secrets of financial investment."

1. Risk and return are directly proportional

In the field of financial investment, returns and risks are directly proportional. Generally speaking, the higher the risk, the higher the return. This is also why high-risk investments usually have higher rates of return. Therefore, we need to choose investment products suitable for ourselves based on our own risk tolerance and investment objectives.

Here, I would like to share a foolish thing I have done, which is P2P. I was also fashionable and was one of the first to participate in P2P and make money, but later I was also one of those who were deceived.

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The reason I was deceived by P2P, in the final analysis, is that I was too greedy. After enjoying a stable return of more than 10%, I thought it was a windfall. As a result, what I thought was his high interest, and what he thought was my principal.

So when choosing investment targets, everyone must seek reasonable, compliant, and safe investment products. Do not blindly pursue high returns to avoid losing everything.

2. Diversification of investments can reduce risk

Diversified investment is an effective way to reduce investment risk. If all investments are concentrated in a certain industry, a certain stock, or a certain region, then once this industry, stock, or region encounters problems, the value of the entire investment portfolio will be affected. Therefore, reasonable diversification of investments can reduce investment risk and increase returns.

This diversification of investment does not mean buying dozens or even hundreds of funds or stocks at once. Instead, it means choosing products from different industries, different regions, and different types of investments, which can be considered as investment diversification.I initially purchased 4 white liquor stocks and 2 pharmaceutical stocks, thinking it was diversification, but my account rose and fell in tandem every day, failing to serve the purpose of risk dispersion.

Now, I have adjusted my portfolio to include different broad-based indices, industry indices, and a stable allocation, and indeed, my account has become much more stable.

In the process of investing, we do not seek speed but rather progress with stability; this is the best asset allocation and value-added strategy.

III. The longer the time, the higher the returns

Time is a friend to investment. Long-term investing allows us to better withstand risks in a volatile market and also enjoy higher returns. Therefore, we need to consider the factor of time in our investments, persist in long-term investment, and continuously improve our investment skills through learning.

Why is it said that the longer the better? The key is that it suits us, the novices without much capital. Our greatest advantage is youth, and our greatest disadvantage is the lack of money. Thus, extending the time to accumulate capital is the best way for us to make money.

IV. Management fees have a significant impact on investment returns

Management fees greatly affect investment returns. Some investment products may have high management fees, which can reduce the actual returns of investors. Therefore, when choosing investment products, we need to fully understand the costs of the products and seek those with low fees and high cost-performance ratios.

This is a recent investment truth I've come to understand. So, once I have this 1 million out, I will consciously choose broad-based index funds with lower management fees.

Actively managed funds may seem attractive, but after deducting all the high fees, it's a breath-taking realization. To truly make money, broad-based index funds are the most suitable.Five, There's No Free Lunch

In the realm of financial investment, there is no free lunch. Any investment with high returns comes with high risks. We need to carefully assess the balance between risk and reward, and not blindly pursue high returns while ignoring the risks.

Although I share daily warnings about being vigilant against "pig butchering" scams and "pump and dump" schemes, many people still believe in others offering to make them rich for free, ending up with a total loss.

Here, I just want to share one sentence: "Free things are the most expensive in this world."